Financial Trading Blog
Stock of the day 16/12/2014 – FedEx Corp
2014 has been a very strong year for the global courier service, with near-continual growth on the markets. FedEx reached its low at the start of February, at 12814.5; since then, there has been no significant period of decline for the company, culminating in a yearly, and all-time, high of 18352.5 on December 8th. Share prices have dropped off since then, closing Monday at 17597.5 as investors are tentative before FedEx’s next earnings release.
However, regardless of this tentativeness, analysts are predicting a healthy set of numbers from the delivery service. Despite competition from UPS, an expanded US Postal Service, and a delivery-adventurous Amazon, FedEx are forecast to announce a revenue rise of 5.1% to $11.98 billion, alongside a 40% jump in earnings per share to $2.19. There is a word of warning that goes with these attractive figures; FedEx has a history of missing its second and third quarter figures, so these forecasts might be premature.
There was more exciting news for FedEx today, as it announced an agreement to acquire GENCO, a third-party logistics provider, for an estimated $2 billion. GENCO processes more than 600 million returned items annually, and will significantly expand FedEx’s service offerings.
Following these figures, and the upcoming purchase of GENCO, stock analysts have a consensus rating of ‘buy’; this consensus breaks down to one analyst at ‘strong buy’, nine analysts, including Citigroup, at ‘buy’, and six analysts at ‘hold’.
As FedEX begins to deal with the lucrative Christmas rush, the courier service will be hoping that the forecast figures ring true, and provide an early Christmas present for the company that will be delivering so many of its own.
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